Deal near as succession of meetings work on details of $500 million campus

The plan to build a Arizona State University campus in Payson has spurred a flurry of high-level meetings in the past week, although the negotiators have still not set a date to sign a memorandum of understanding between the town and the university.

Last week, town officials met with Arizona Public Service to settle on a $22 million plan to provide electricity to the $500 million campus.

In addition, town officials met with officials from the Tonto National Forest to talk about ways to speed the sale of the 300-acre parcel on the south side of Highway 260 between Mud Springs Road and Tyler Parkway to the town.

Finally, lawyers for Payson and ASU have come down to the final few issues in hammering out the language for the agreement between the two sides.

Reportedly, the final point of contention lies in whether the existing language makes it clear that a community facilities district created by the town will own the land that ASU and other private developers will lease.

The town hopes to insulate Payson taxpayers from any liability and prevent any debt needed to build the campus from having any impact on the town’s own bond rating — which right now is better than the state of Arizona’s.

Arizona’s.

The innovative concept would make the town council the board of directors for a community facilities district, which would own the land, borrow the money to build the campus and then lease the land — both to ASU and to others.

Sources close to the negotiation say they have resolved almost all of the key issues and remain on track to open the campus to students perhaps as soon as the fall semester of 2012 — but more likely not until the spring or fall of 2013.

One of the key sticking points remains buying the land from the U.S. Forest Service.

Payson wants to build the campus on the 300-acre parcel that now houses the Payson Ranger District. The town has offered to include in the sale a town-owned piece of land near the Payson Airport that would house the firefighting operations for the Forest Service. The Payson Ranger District would retain a public contact center near its current location.

Congress approved the sale of the 300-acre parcel years ago and the Forest Service did basic environmental studies on the hilly, forested tract of land when it built the ranger station and firefighting facilities. Forest Service officials at the regional and national level have reportedly said they could move the sale along quickly by stipulating that the sale would have no harmful impacts, particularly on endangered species. The meetings last week involved high-level Forest Service officials discussing ways to facilitate the sale.

Current plans call for a large, convention hotel that would specialize in hosting educational conferences and conventions, as well as an industrial/research park and other businesses directly connected to the campus.

Arizona State University wants to build a campus that would start with less than 2,000 students, but eventually grow to perhaps 6,000 students.

Current plans envision dorms built and operated by private contractors and a wireless Internet system that would encompass the whole town and buildings nestled in among the pine trees. The campus would deploy the latest environmentally friendly technologies, so that it could actually sell back to the power company energy generated by solar and geothermal technologies.

ASU and Payson had originally planned to sign a memorandum of understanding back in March. That agreement would have spelled out the obligations on each side and would have supposedly led to a complete, binding agreement to build the campus and lease it to ASU by the end of this year.

Uncertainties about ASU’s plans and whether Arizona voters would approve a sales tax increase delayed the signing. Back and forth discussions about the precise wording of the agreement involving the two teams of lawyers interjected additional delays, according to sources close to the negotiations.

The long delay in signing the agreement has spawned increasing doubts throughout the town about whether the campus has turned into a pipe dream. However, negotiators say the deal remains firm, although the details have multiplied.

Payson Mayor Kenny Evans has reportedly obtained commitments from donors and investors totaling at least $500 million. That total includes about $100 million in promised donations and more than $400 million in promised financing.

The negotiations have proven unexpectedly complex, in part because of the groundbreaking nature of the proposal.

Previously, ASU has always built its own facilities, using state-backed bonds. However, the university has suffered major funding cuts and has nearly exhausted its bonding capacity. That has made it almost impossible for ASU to continue building facilities to accommodate the steadily rising student demand.

ASU’s three campuses in the Valley already make it the largest public university in the country — with more than 55,000 students. Arizona remains one of the few states in the country with few private colleges to supplement the public universities.

Cuts imposed by the Arizona Legislature have forced ASU to double and then redouble its tuition — which now stands at about $9,000 annually. Moreover, the university this year for the first time had to limit enrollment by raising admissions standards. Previously, the state’s three universities guaranteed admission to any high school student in the state with a C average.

The Payson campus offers an innovative model for an escape from that bind.

Town officials say that by using private contractors to build the campus and related businesses, they can dramatically reduce the total cost of the campus when compared to building similar facilities within the strictures of state contracting requirements.

Both sides hope that the Payson campus can operate at about half the per-student cost of ASU’s Tempe campus, in part because the program will focus on undergraduate degrees and avoid expensive, facilities needed for intensive graduate programs.

In effect, the Payson campus would become the model for the development of a state college system, leaving the door to a college education ajar for students increasingly priced out of an education by ASU’s spiraling tuition.